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2014 Annual Report Walmart
2014 Annual Report Walmart
So many ways to
Save money.
Live better.
Associate
career opportunities
Walmart de Mexico promoted
more than 22,700 associates
in fiscal 2014.
2014 Annual Report
Toward
a more
sustainable
tomorrow
Today, 24% of
our electricity
comes from
renewable sources.
2014 Ann
ual Repor
147046_L01_CVR.indd 1
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2.2M
dedicated
associates
globally
4 of 5
190,000
U.S. store/club associates
promoted in scal 2014
5.11 acre
of forestland preserved
via managed forestry
983 fewer
trees consumed
via recycling
129,537 kWh
46,835 kWh
459,333 fewer
gallons of water
consumed
NT
RI
ED US
IN
10
%
Walmart 2014 Annual
Report 2
W
E
0
associates
have 10+ years
of service
GY
300K
The minimized environmental footprint of this report is the result of an extensive, collaborative effort of Walmart and our supply chain
partners. The environmental and social impact continues to be an important consideration. It is printed on paper from well-managed
forests containing recycled PCW fiber that is Elementally Chlorine Free (ECF). It is printed using 100 percent renewable wind power
(RECs), along with environmental manufacturing principles that were utilized in the printing process. These practices include environmentally responsible procurement, lean manufacturing, green chemistry principles, the recycling of residual materials and reduced
volatile organic compound inks and coatings.
IND EN
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Approximately
*
75%
of store management
joined Walmart as
hourly associates
100K
honorably
discharged U.S.
veterans expected
to be hired by
Walmart U.S.
and Sams Club
by 2018
57%
of our
International
associates
are women
*Represents Walmart U.S. data only.
Walmart 2014 Annual Report 1
Delivering
for customers
and shareholders
250M
33M
$68B*
30%*
$68B*
12%*
customers served
weekly in our stores
in 27 countries
approximate retail
square footage added
in fiscal 2014
returned to shareholders
through dividends and
share repurchases
total shareholder
returns (CAGR)
To our
shareholders,
associates and
customers:
Im deeply honored to lead Walmart at such an exciting time.
Walmart has a rich history and is well-positioned for the future.
We have an authentic and important purpose. Were grounded
with strong values and have millions of associates who share a
culture and belief in doing what is right for our customers, our
communities and each other. The future will bring a lot of
change as the rapid growth of digital commerce enables us
to serve customers in new and exciting ways. Our customers
continue to search for value, a broad assortment and a
shopping experience that saves them time and money. With
greater convergence of digital and physical retail, were investing in capabilities to provide customers even more choice
and convenience. When I think about all these capabilities,
Im confident in Walmarts continued growth and enthusiastic
about our future.
Doug McMillon
President and
Chief Executive Officer
Wal-Mart Stores, Inc.
Doug McMillon
President and Chief Executive Officer
Wal-Mart Stores, Inc.
Nearly
140 million
customers served
each week
Were offering
customers convenient digital and
physical access to
Walmarts broad
merchandise
assortment and
investing in price
leadership to
provide even
greater value.
Bill Simon
President and CEO
Walmart U.S.
Well also connect Walmarts physical assets to the broad assortment that is available
through nearby stores and online, delivering anytime access to our brand. Were testing
grocery delivery in several markets and also piloting an easy pickup option for online
grocery and general merchandise. Innovations such as these expand our reach to more
customers on their terms.
International
More than
6,100
retail units
operated in
26
countries
1.6 million
demos in
630 clubs
last year
Were focused
on creating even
more value for
our members,
through great
merchandise
at exceptional
values. Our new
membership
enhancements
will make a Sams
Club membership
more rewarding
than ever.
Rosalind Brewer
President and CEO
Sams Club
Strong governance:
a commitment
that endures
Walmarts strength as a retailer has continued through more
than five decades of economic change and retail industry
transformation. Its a remarkable record, based on our unique
ability to deliver on our purpose for customers, the strength
of our culture and the foundation of strong governance by
our Board of Directors. All of this together allows Walmart to
improve shareholder value.
Our Board is more diverse than most public company boards,
with broad global business expertise ranging from technology
to retail, and finance to compliance. Our directors diverse perspectives and experiences provide the support and foundation
for our management team, as they refine our business strategy
for changing customer needs.
Walmarts Board views succession planning as a critical
responsibility, and its a topic upon which the company has
spent considerable time and effort. This diligence has served
shareholders well, as weve added talented new directors over
the past few years. And, we were very pleased to name Doug
McMillon to our Board and as Walmarts new CEO following
Mike Dukes retirement.
Stability and high governance standards. Doug becomes
only the fourth CEO of Walmart since Dad separated the roles
of Chairman and CEO in 1988. That, too, is a remarkable record
of stability and the high governance standards established by
our Board. Doug is a superb choice to lead Walmart. He has
grown up in the company starting as an hourly associate in
one of our distribution centers at the age of 17. After completing his MBA program, Doug began what is now a 23-year record
of effective leadership that has prepared him to serve as CEO.
He keenly understands everything Walmart people, our core
operations, opportunities and challenges at a fundamental level.
Doug is deeply grounded in Walmarts culture, including the
importance of staying out in front of change, as Dad used to
say. Im confident that Dougs leadership will provide Walmart
a bright and robust future.
Mike served exceptionally well as CEO for the past five years,
and his contributions to Walmart over his 18-year career are
many. In each leadership role, Mike demonstrated integrity in
dealing with tough issues, displayed the greatest character and
consideration for people, and had a steely determination to do
the right thing for our associates, shareholders and the communities we serve. Among Mikes signature contributions as
CEO was his commitment to investing in our global e-commerce
business, critical for Walmarts long-term growth. In addition,
Mikes passion for increasing productivity re-engaged the
company in leveraging expenses so that we can lower prices
for our customers. Mike is a terrific leader, and Im extremely
pleased that well continue to benefit from his insight as a
member of our Board.
A commitment to board independence. Our family is proud
to have a representation in guiding Walmarts future, but were
committed to independent board governance. Today, 10 of
our 16 incumbent directors are independent. These men and
women are dedicated to serving shareholders. In fact, our
directors attended 97 percent of Board and committee meetings in fiscal 2014. They challenge management on delivering
business objectives and employing strategies to win in this
shifting global retail landscape. And the Board consistently
evaluates steps to strengthen governance. Since my letter to
you last year, we increased the stock ownership guidelines
for our CEO and certain executive officers to further align their
interests with long-term shareholder value. We also amended
Walmarts bylaws to allow shareholders owning at least
10 percent of outstanding shares to request a special shareholders
meeting. In addition, Dr. James Cash was appointed Presiding
Director, bringing tremendous experience from his service on
Walmarts and other boards. And, reflecting our commitment to
independence, the Board amended our Corporate Governance
Guidelines to clarify and expand the roles and responsibilities
of the Presiding Director.
Our Board also has overseen significant enhancements to our
global compliance program. For more details on this progress,
I encourage you to review Walmarts Global Compliance
Program: Report on Fiscal Year 2014, on our website at
stock.walmart.com. You can also review our proxy statement
for further details about our board members, governance
structure and executive compensation.
In closing, Dad woke up every day trying to make things better,
and was never satisfied when they were good or even great.
Today, that passion for continuous improvement remains
thoroughly embedded in Walmart, and especially in our new
CEO. With an enduring commitment to strong corporate
governance and effective leaders to chart our course, Im
confident that our remarkable story of progress will continue.
S. Robson Walton
Chairman of the Board of Directors
Wal-Mart Stores, Inc.
Board of Directors
From Left to right:
1| Linda S. Wolf
Ms. Wolf is the retired Chairman of the Board of Directors
and Chief Executive Officer of Leo Burnett Worldwide, Inc.,
an advertising agency and division of Publicis Groupe S.A.
2| Steven S Reinemund
Mr. Reinemund is the Dean of Business and Professor of
Leadership and Strategy at Wake Forest University. He
previously served as the Chairman of the Board and
Chairman and Chief Executive Officer of PepsiCo, Inc.
3| James I. Cash, Jr., Ph.D. (Presiding director)
Dr. Cash is the James E. Robison Emeritus Professor of
Business Administration at Harvard Business School,
where he served from July 1976 to October 2003.
4| H. Lee Scott, Jr.
Mr. Scott is the former Chairman of the Executive
Committee of the Board of Directors of Wal-Mart
Stores, Inc. He is the former President and Chief
Executive Officer of Wal-Mart Stores, Inc., serving in
that position from January 2000 to January 2009.
5| Roger C. Corbett
Mr. Corbett is the retired Chief Executive Officer and
Group Managing Director of Woolworths Limited, the
largest retail company in Australia.
Board Committees:
Name
Audit
Comp.,
Nominating &
Governance
Executive
S. Robson Walton
6| Aida M. Alvarez
Ms. Alvarez is the former Administrator of the U.S. Small
Business Administration and was a member of President
Clintons Cabinet from 1997 to 2001.
7| Jim C. Walton
Mr. Walton is the Chairman of the Board of Directors
and Chief Executive Officer of Arvest Bank Group, Inc.,
a group of banks operating in the states of Arkansas,
Kansas, Missouri and Oklahoma.
8| S. Robson Walton
Mr. Walton is the Chairman of the Board of Directors
of Wal-Mart Stores, Inc.
9| Gregory B. Penner
Mr. Penner is a General Partner at Madrone Capital
Partners, an investment management firm.
Global
Comp.
Strategic
Planning
Tech &
& Finance e-commerce
Name
Audit
Comp.,
Nominating &
Governance
Doug McMillon
(FE)
Gregory B. Penner
Roger C. Corbett
Steven S Reinemund
(FE)
Strategic
Planning
Tech &
& Finance e-commerce
(C)
(C)
Douglas N. Daft
Timothy P. Flynn(FE)
Global
Comp.
(C)
Michael T. Duke
Executive
Marissa A. Mayer
Aida M. Alvarez
Pamela J. Craig
Jim C. Walton
(C)
ChristopherJ.Williams(FE)
(C)
Linda S. Wolf
(C)
Committee Chair
(C)
(FE)
Financial Expert
Our FY 2014
Financial Performance
Fiscal 2014 was a tough year for Walmart. Sales and earnings were not where we wanted them
to be, as we faced a number of economic headwinds around the world. But Im confident in our
future because Walmart continues to have an extremely strong underlying business. Were proud
of our AA credit rating the highest in the retail industry. We have a strong balance sheet, and our
business consistently generates robust cash flows. Walmarts EDLC-EDLP business model resonates
with customers, and even in this challenging retail environment, we delivered more than $473 billion
in net sales. We also have great opportunities for continued global growth, whether its through
the intersection of digital and physical retail, small format stores, or our increasing membership in
Sams Club. When I consider our opportunities ahead, Im excited about our future, and specifically
this new fiscal year.
At Walmart, were guided by our financial priorities growth, leverage and returns. Customers
want to shop on their terms. Were focused on growth by providing customers a unified shopping
experience, whether theyre in our supercenters for a large stock-up trip, in our smaller stores for
groceries, or on their mobile device at their childs ball game. Our top priority is to increase comp
sales in all markets and channels. We drive productivity to deliver EDLC so we can pass savings to
customers. These price investments provide greater value under our EDLP position to propel comp
sales. In fiscal 2015, well also invest approximately $12.4 billion to $13.4 billion in physical and digital
assets to better serve customers worldwide. We expect to add between 35 million and 39 million
net new retail square feet. And to connect with customers more effectively, were accelerating
the rollout of small format stores in many of our markets, including the U.S., the U.K. and Mexico.
Global eCommerce saw strong growth in fiscal 2014, with a 30 percent increase in sales. Well
continue to invest to enhance technology platforms and expand fulfillment networks, including
new facilities in Pennsylvania, Indiana and Brazil. Infrastructure investments help us to be nimble
platform, Pangaea, will deliver a world-class integrated customer experience and improve our website
speed, flexibility and scalability when it begins to roll out later this year. Were also leveraging global
best practices to increase site visits and add services such as the Asda Direct kiosk which allows
customers to order from online catalogs while theyre still in the store to grocery delivery and
drive-through pickup, which were testing in Denver in the U.S. In fiscal 2015, we expect Global
eCommerce gross merchandise value, which includes digital sales of Walmart goods and third-party
sales through our sites, to exceed $13 billion.
Were committed to being the lowest cost operator globally and leveraging expenses. In fiscal
2014, Walmart U.S. did a great job of leveraging operating expenses, and International and Sams Club
took steps to lower their cost structures. Were sharpening our ability to drive efficiencies in all
operations. Globally, our teams are identifying best practices and sharing these efficiency measures
so that they can be applied across the organization.
Returning value to shareholders remains a key priority. In fact, we returned $12.8 billion to
shareholders through dividends and share repurchases last year, bringing our five-year total to
nearly $68 billion. And, in February, we announced our 41st consecutive annual dividend increase
to $1.92 per share.
As I close, I encourage you to review our financial results in the next section. Were focused on
consistent execution in every market to continue to serve our customers and deliver growth,
leverage and returns for shareholders.
At Walmart,
were guided
by our financial
priorities growth,
leverage and
returns.
Charles Holley, Jr.
Executive Officers
Neil M. Ashe
Executive Vice President, President and
Chief Executive Officer, Global eCommerce
Rollin L. Ford
Executive Vice President and
Chief Administrative Officer
Daniel J. Bartlett
Executive Vice President, Corporate Affairs
Jeffrey J. Gearhart
Executive Vice President, Global Governance and
Corporate Secretary
Rosalind G. Brewer
Executive Vice President, President and
Chief Executive Officer, Sams Club
M. Susan Chambers
Executive Vice President, Global People
C. Douglas McMillon
President and Chief Executive Officer
David Cheesewright
Executive Vice President, President and
Chief Executive Officer, Walmart International
William S. Simon
Executive Vice President, President and
Chief Executive Officer, Walmart U.S.
Michael T. Duke
Chairman of the Executive Committee
of the Board of Directors
Steven P. Whaley
Senior Vice President and Controller
38 Consolidated Statements of
Shareholders Equity
(Amounts in millions, except per share and unit count data)
Operating results
Total revenues
Percentage change in total revenues from previous fiscal year
Net sales
Percentage change in net sales from previous fiscal year
Increase (decrease) in calendar comparable sales (1)
in the United States
Walmart U.S.
Sams Club
Gross profit margin
Operating, selling, general and administrative expenses,
as a percentage of net sales
Operating income
Income from continuing operations attributable to Walmart
Net income per common share:
Diluted income per common share from
continuing operations attributable to Walmart
Dividends declared per common share
Financial position
Inventories
Property, equipment and capital lease assets, net
Total assets
Long-term debt and long-term capital lease obligations
(excluding amounts due within one year)
Total Walmart shareholders equity
Unit counts
Walmart U.S. segment
Walmart International segment
Sams Club segment
Total units
$4.85
$5.01
$4.53
$4.18
$3.72
1.88 1.59 1.46 1.21 1.09
$44,858
$43,803
$40,714
$36,437
$32,713
117,907 116,681 112,324 107,878 102,307
204,751 203,105 193,406 180,782 170,407
44,559 41,417 47,079 43,842 36,401
76,255 76,343 71,315 68,542 70,468
(1) C
omparable store and club sales include fuel. Comparable sales include sales from stores and clubs open for the previous 12 months, including remodels, relocations and
expansions, as well as e-commerce sales.
Growth
Net Sales
(Amounts in millions)
2014 2013
Net Sales
2012
Walmart U.S.
Walmart International
Sams Club
Net sales
Our consolidated net sales increased 1.6% and 5.0% for fiscal 2014 and 2013, respectively, when compared to the previous fiscal year. The increase
in net sales for fiscal 2014 was primarily due to 3.1% year-over-year growth in retail square feet, higher e-commerce sales, the impact of fiscal 2013
acquisitions, which accounted for $730 million of the net sales increase, and positive comparable club sales at Sams Club. The positive effect of these
items was partially offset by $5.1 billion of negative impact from fluctuations in currency exchange rates and decreases in comparable store sales at
Walmart U.S. and in a number of our international operations. The increase in net sales for fiscal 2013 was due to 3.3% growth in retail square feet
and positive comparable store and club sales. Additionally, net sales from acquisitions, through their respective anniversary dates, accounted for
$4.0 billion of the increase in net sales. The increase in net sales for fiscal 2013 was partially offset by $4.5 billion of negative impact from fluctuations in
currency exchange rates.
With Fuel
Fuel Impact
2014
2013
2014 2013
Walmart U.S.
Sams Club
Total U.S.
Comparable store and club sales in the U.S., including fuel, decreased 0.5% in fiscal 2014 and increased 2.4% in fiscal 2013, when compared to the
previous fiscal year. The total U.S. comparable store and club sales for fiscal 2014 were negatively impacted by lower consumer spending primarily due
to the slow recovery in general economic conditions, the 2% increase in the 2013 payroll tax rate, and the reduction in government food benefits and
severe winter storms that occurred during the fourth quarter. These factors were partially offset by increased member traffic at Sams Club primarily
coming from Savings Members. Additionally, e-commerce sales positively impacted Walmart U.S. comparable store and Sams Club comparable club
sales percentages by approximately 0.3%. The total U.S. comparable store and club sales for fiscal 2013 increased as a result of improved average ticket
and an increase in customer traffic.
As we continue to add new stores and clubs in the U.S., we do so with an understanding that additional stores and clubs may take sales away from
existing units. We estimate the negative impact on comparable store and club sales as a result of opening new stores and clubs was approximately
0.8% and 0.7% in fiscal 2014 and 2013, respectively. Our estimate is calculated primarily by comparing the sales trends of the impacted stores and
clubs, which are identified based on their proximity to the new stores and clubs, to those of nearby non-impacted stores and clubs, in each case,
as measured after the new stores and clubs are opened.
Leverage
Operating Income
(Amounts in millions)
2014 2013
Operating Percent Percent
Income
ofTotal
Change
2012
Walmart U.S.
Walmart International
Sams Club
Corporate and support
Operating income
Operating Percent
Income
of Total
$26,491 100.0%
We believe comparing both the growth of our operating expenses and our operating income to the growth of our net sales are meaningful measures
as they indicate how effectively we manage costs and leverage operating expenses. Our objective for a fiscal year is to grow operating expenses at a
slower rate than net sales and to grow operating income at a faster rate than net sales. On occasion, we may make strategic growth investments that
may, at times, cause our operating expenses to grow at a faster rate than net sales and that may result in our operating income growing at a slower
rate than net sales.
Returns
Return on Investment
Management believes return on investment (ROI) is a meaningful
metric to share with investors because it helps investors assess how
effectively Walmart is deploying its assets. Trends in ROI can fluctuate
over time as management balances long-term potential strategic
initiatives with possible short-term impacts. ROI was 17.0% and 18.1% for
fiscal 2014 and 2013, respectively. The decline in ROI was primarily due to
a decline in operating income, investments in property and equipment
and the impact of acquisitions.
ROI is considered a non-GAAP financial measure. We consider return on
assets (ROA) to be the financial measure computed in accordance with
generally accepted accounting principles (GAAP) that is the most
directly comparable financial measure to our calculation of ROI. ROA was
8.1% and 8.9% for fiscal 2014 and 2013, respectively.
We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for
the trailing twelve months or fiscal year divided by average invested
capital during that period. We consider average invested capital to be
the average of our beginning and ending total assets of continuing
operations, plus average accumulated depreciation and amortization
less average accounts payable and average accrued liabilities for that
period, plus a rent factor equal to the rent for the fiscal year or trailing
twelve months multiplied by a factor of eight. When we have discontinued
operations, we exclude the impact of the discontinued operations.
Our calculation of ROI is considered a non-GAAP financial measure
because we calculate ROI using financial measures that exclude and
include amounts that are included and excluded in the most directly
comparable GAAP financial measure. For example, we exclude the
impact of depreciation and amortization from our reported operating
income in calculating the numerator of our calculation of ROI. In addition, we include a factor of eight for rent expense that estimates the
hypothetical capitalization of our operating leases. ROI differs from ROA
(which is consolidated income from continuing operations for the period
divided by average total assets of continuing operations for the period)
because ROI: adjusts operating income to exclude certain expense items
and adds interest income; adjusts total assets of continuing operations
for the impact of accumulated depreciation and amortization, accounts
payable and accrued liabilities; and incorporates a factor of rent to arrive
at total invested capital.
Although ROI is a standard financial metric, numerous methods exist
for calculating a companys ROI. As a result, the method used by
management to calculate our ROI may differ from the methods used by
other companies to calculate their ROI. We urge you to understand
the methods used by other companies to calculate their ROI before
comparing our ROI to that of such other companies.
Fiscal Years
Ended January 31,
(Amounts in millions)
2014 2013
$38,689 $38,970
Denominator
Average total assets
of continuing operations (1)
$203,680 $198,193
+ Average accumulated depreciation
and amortization (1)
57,907 51,829
- Average accounts payable (1)
37,748 37,344
- Average accrued liabilities (1)
18,802 18,481
+ Rent x 8
22,624 20,648
= Average invested capital
$227,661 $214,845
17.0% 18.1%
$203,680 $198,193
As of January 31,
2014 2013 2012
$23,257
$25,591 $24,255
$10,142
$12,693 $10,745
(1) Net cash used in investing activities includes payments for property and
equipment, which is also included in our computation of free cash flow.
Total revenues
Percentage change in
total revenues from
previous fiscal year
Net sales
Percentage change in
net sales from
previous fiscal year
Total U.S. calendar comparable
store and club sales
Gross profit margin as a
percentage of net sales
Operating income
Operating income as a
percentage of net sales
Income from continuing
operations
Unit counts at period end
Retail square feet at period end
Our total revenues, which are mostly comprised of net sales, but also
include membership and other income, increased 1.6% and 5.0% for fiscal
2014 and 2013, respectively, when compared to the previous fiscal year.
The increase in total revenues was primarily a result of increases in our
net sales, which also increased 1.6% and 5.0% for fiscal 2014 and 2013,
respectively. The increase in net sales for fiscal 2014 was primarily due to
3.1% year-over-year growth in retail square feet, higher e-commerce sales,
the impact of fiscal 2013 acquisitions, which accounted for $730 million
of the net sales increase, and positive comparable club sales at Sams Club.
The positive effect of these items was partially offset by $5.1 billion of
negative impact from fluctuations in currency exchange rates and
decreases in comparable store sales at Walmart U.S. and in a number of
our international operations. The increase in net sales for fiscal 2013 was
due to 3.3% growth in retail square feet and positive comparable store
and club sales. Additionally, net sales from acquisitions, through their
respective anniversary dates, accounted for $4.0 billion of the increase in
net sales. The increase in net sales for fiscal 2013 was partially offset by
$4.5 billion of negative impact from fluctuations in currency exchange
rates. Increases in membership and other income of 5.6%, primarily due
to higher membership and other income at Sams Club, also contributed
to the increase in total revenues for fiscal 2014 and 2013.
Our gross profit rate decreased 3 basis points for fiscal 2014, when
compared to the previous fiscal year, primarily due to our ongoing
investment in price, as well as merchandise mix. For fiscal 2013, gross
profit rate decreased 12 basis points, when compared to the previous
fiscal year, primarily due to the Walmart U.S. segments strategic focus
on price investment and low price leadership.
For fiscal 2014, we did not meet our objective of growing operating
expenses at a slower rate than net sales as operating expenses as a
percentage of net sales increased 27 basis points. Overall, lower than
anticipated net sales, higher investment in key areas, such as global
leverage and e-commerce initiatives, and nearly $1.0 billion of increased
expenses for various matters described in the Walmart International
segment discussion, were the primary cause for the increase in operating
expenses as a percentage of net sales. Additional expenses related to the
FCPA inquiries and investigations, as well as our global compliance program and related organizational enhancements also contributed to the
increase in operating expenses as a percentage of net sales. The negative
leverage impact of these items was partially offset by lower incentive
expenses for fiscal 2014. For fiscal 2013, we met our objective of growing
operating expenses at a slower rate than net sales as operating expenses
as a percentage of net sales decreased 14 basis points. The fiscal 2013
decrease in operating expenses as a percentage of net sales was primarily
due to productivity improvements and expense management.
For fiscal 2014, we did not meet our objective of growing operating
income at a faster rate than net sales as operating income decreased
3.1% while net sales increased 1.6%, when compared to the previous
fiscal year. This was primarily due to the factors we discussed for not
leveraging operating expenses, partially offset by increases in membership and other income. For fiscal 2013, we also did not meet our
objective of growing operating income at a faster rate than net sales as
operating income increased 4.7% while net sales increased 5.0%, when
compared to the previous fiscal year. The primary causes for operating
income growing slower than net sales in fiscal 2013 were investments in
e-commerce initiatives, increased expenses related to the FCPA inquiries
and investigations, as well as our global compliance program and related
organizational enhancements, and investments in price, which reduced
gross margin.
Our effective income tax rates were 32.9%, 31.0% and 32.6% for fiscal 2014,
2013 and 2012, respectively. The reconciliation from the U.S. statutory
rate to the effective income tax rates for fiscal 2014, 2013 and 2012 is
presented in Note 9 in the Notes to Consolidated Financial Statements.
Our effective income tax rate for fiscal 2014 was higher than in fiscal 2013
primarily due to the tax impacts attributable to repatriated international
earnings during fiscal 2014. Our fiscal 2013 effective income tax rate was
lower than in fiscal 2012 primarily because the fiscal 2013 rate benefited
from a number of discrete tax items, including the positive impact from
fiscal 2013 legislative changes arising at the end of the fiscal 2012 year,
most notably the American Taxpayer Relief Act of 2012. Our effective
income tax rate may fluctuate from period to period as a result of factors
including changes in our assessment of certain tax contingencies,
increases or decreases in valuation allowances, changes in tax law,
outcomes of administrative audits, the impact of discrete items and the
mix of earnings among our U.S. and international operations where
the statutory rates are generally lower than the U.S. statutory rate.
As a result of the factors discussed above, we reported $16.6 billion,
$17.7 billion and $16.4 billion of consolidated income from continuing
operations for fiscal 2014, 2013 and 2012, respectively, a decrease of
$1.1 billion for fiscal 2014 and an increase of $1.3 billion for fiscal 2013,
when compared to the previous fiscal year. Diluted income per common
share from continuing operations attributable to Walmart (EPS) was
$4.85, $5.01 and $4.53 for fiscal 2014, 2013 and 2012, respectively.
(Amounts in millions,
except unit counts)
Net sales
Percentage change from
previous fiscal year
Calendar comparable
store sales
Operating income
Operating income as a
percentage of net sales
Unit counts at period end
Retail square feet at
period end
Net sales for the Walmart U.S. segment increased 1.8% and 3.9% for fiscal
2014 and 2013, respectively, when compared to the previous fiscal year.
For fiscal 2014, the increase in net sales was due to year-over-year growth
in retail square feet of 2.9%, partially offset by a decline in comparable
store sales of (0.6)%. Our comparable store sales were negatively impacted
by lower consumer spending primarily due to the slow recovery in
general economic conditions, the 2% increase in the 2013 payroll tax
rate, and the reduction in government food benefits and severe winter
storms that occurred in the fourth quarter. For fiscal 2013, the increase in
net sales was due to a 2.0% increase in comparable store sales as a result
of higher average ticket and an increase in customer traffic, combined
with a 2.2% increase in retail square feet.
The fiscal 2014 gross profit rate declined slightly when compared to
the previous fiscal year primarily due to our commitment to low price
leadership, especially during fiscal 2014s highly competitive holiday
sales season, partially offset by cost of goods savings initiatives and
supply chain productivity. Gross profit rate declined 16 basis points for
fiscal 2013, when compared to the previous fiscal year, primarily due
to our strategic focus on price investment and low price leadership.
Walmart U.S. leveraged operating expenses for fiscal 2014 and 2013,
as operating expenses as a percentage of segment net sales declined
18 and 27 basis points, respectively, compared to the previous fiscal
year. The decrease in operating expenses as a percentage of segment
net sales was driven by productivity initiatives in both years, as well
as lower incentive expenses in fiscal 2014.
As a result of the factors discussed above, segment operating income
was $22.4 billion, $21.5 billion and $20.4 billion during fiscal 2014, 2013
and 2012, respectively, and Walmart U.S. grew operating income faster
than sales during fiscal 2014 and 2013.
(Amounts in millions,
except unit counts)
Net sales
$136,513 $134,748 $125,435
Percentage change from
previous fiscal year
1.3% 7.4% 15.3%
Operating income
$5,454 $6,617 $6,113
Operating income as
a percentage of net sales
4.0% 4.9% 4.9%
Unit counts at period end
6,107 5,783 5,287
Retail square feet at period end
358 346 326
Net sales for the Walmart International segment increased 1.3% and 7.4%
for fiscal 2014 and 2013, respectively, when compared to the previous
fiscal year. For fiscal 2014, the increase in net sales was due to year-overyear growth in retail square feet of 3.6% and the impact of fiscal 2013
acquisitions, which accounted for $730 million of the net sales increase.
In addition, higher e-commerce sales in each country with e-commerce
operations, particularly in the United Kingdom, Brazil and China,
contributed to the increase in net sales. The increase in net sales was
partially offset by $5.1 billion of negative impact from fluctuations in
currency exchange rates. For fiscal 2013, the increase in net sales was
due to year-over-year growth in retail square feet of 5.9% and positive
comparable sales. In addition, net sales from fiscal 2012 acquisitions
accounted for $4.0 billion of the increase in net sales. The increase in
net sales was partially offset by $4.5 billion of negative impact from
fluctuations in currency exchange rates.
Gross profit rate decreased 10 basis points for fiscal 2014 and was flat for
fiscal 2013, when compared to the previous fiscal year. The fiscal 2014
decrease in gross profit rate was primarily due to price investments in
certain countries, including Brazil, Canada and Mexico.
Walmart International did not leverage operating expenses for fiscal 2014
as operating expenses as a percentage of segment net sales increased
80 basis points, when compared to the previous fiscal year. Operating
expenses as a percentage of segment net sales were impacted by lower
than anticipated net sales, increased wages and strategic investments,
including investments in e-commerce initiatives. In addition, we incurred
nearly $1.0 billion of aggregated expenses for the following matters that
contributed to the increase in our operating expenses as a percentage
of segment net sales:
Charges for contingencies for non-income taxes and employment
claims in Brazil;
Charges for the closure of 29 units in China and 25 units in Brazil due
to poor performance;
Store lease expenses in China and Mexico to correct a historical
accounting practice that did not conform to our global accounting
policies; and
Expenses for the termination of the joint venture, franchise and
supply agreements related to our former partners retail store operations
in India.
(Amounts in millions,
except unit counts)
Including Fuel
Net sales
Percentage change from
comparable period
Calendar comparable
club sales increase
Operating income
Operating income as
a percentage of net sales
Unit counts at period end
Retail square feet at period end
Excluding Fuel
Net sales
Percentage change from
previous fiscal year
Operating income
Operating income as
a percentage of net sales
Net sales for the Sams Club segment increased 1.3% and 4.9% for fiscal
2014 and 2013, respectively, when compared to the previous fiscal year.
The fiscal 2014 increase in net sales was due to year-over-year growth in
retail square feet of 2.1%, driven by the addition of 12 new clubs, as well
as positive comparable club sales of 0.3%. Our positive comparable
club sales were the result of increased member traffic primarily coming
from our Savings Members, partially offset by severe winter storms that
occurred in the fourth quarter. The net sales increase in fiscal 2013 was
primarily due to positive comparable club sales, driven by an increase
in customer traffic and average ticket. The addition of nine new clubs
in fiscal 2013 also helped increase net sales.
Gross profit rate was flat for fiscal 2014 and 2013, when compared to the
previous fiscal year. For fiscal 2014, our gross profit was negatively impacted
by $39 million from an adjustment to our product warranty liabilities,
which was offset by a favorable impact from merchandise mix.
Membership and other income increased 14.1% and 3.0% for fiscal
2014 and 2013, respectively, when compared to the previous fiscal year.
The fiscal 2014 increase was primarily due to the improved contract terms
relating to the profit sharing arrangement with our credit card provider,
increased membership fees that were introduced on May 15, 2013,
$24 million of income from the sale of two real estate properties and
an increase in members from the opening of 12 new clubs. The fiscal
2013 increase was primarily due to an increase in total members aided
by the opening of nine new clubs.
Sams Club did not leverage expenses for fiscal 2014 as operating
expenses as a percentage of segment net sales increased 26 basis points,
when compared to the previous fiscal year. The increase in operating
expenses as a percentage of segment net sales was primarily due to a
$59 million charge for the implementation of a new in-club staffing
structure and the pending closure of one club, as well as a state excise
tax refund credit we received in the previous fiscal year. Sams Club
leveraged expenses for fiscal 2013 as operating expenses as a percentage
of segment net sales decreased 9 basis points, when compared to the
previous fiscal year. The fiscal 2013 decrease was due to improved wage
management, a state excise tax refund credit we received and lower
expenses in connection with club remodels.
As a result of the factors discussed above, operating income was
$2.0 billion, $2.0 billion and $1.8 billion for fiscal 2014, 2013 and 2012,
respectively. Sams Club did not grow operating income faster than
net sales in fiscal 2014, but did grow operating income faster than sales
in fiscal 2013.
$23,257
$25,591 $24,255
$12,693 $10,745
(1) Net cash used in investing activities includes payments for property and equipment,
which is also included in our computation of free cash flow.
Pending Transaction
As discussed in Note 13 to our Consolidated Financial Statements,
we currently anticipate completing the following transaction that will
impact our future cash flows from investing activities:
Vips Restaurant Business in Mexico
In September 2013, Wal-Mart de Mxico, S.A.B. de C.V. (Walmex),
a majority-owned subsidiary of the Company, entered into a
definitive agreement with Alsea S.A.B. de C.V. to dispose of Walmexs
Vips restaurant business (Vips) in Mexico for approximately
$625 million. Accordingly, the Vips operating results are presented
as discontinued operations in the Companys Consolidated
Statements of Income for fiscal 2014, 2013 and 2012. Additionally,
the Vips assets and liabilities to be disposed of are reported
separately in the Companys Consolidated Balance Sheets as of
January 31, 2014. The Vips sale is subject to approval by Mexican
regulatory authorities and is currently expected to close during
the first half of fiscal 2015. Upon completion of this transaction,
the Company expects to record a net gain, which will be recorded
in discontinued operations in the Companys Consolidated
Statements of Income.
Fiscal 2015
Fiscal 2015
Projected Capital Projected Growth in
Expenditures
Retail Square Feet
(in billions)
(in thousands)
Walmart U.S.
Walmart International
Sams Club
Corporate and support
$ 6.4 to $ 6.9
4.0 to 4.5
1.0 to 1.0
1.0 to 1.0
21,000 to 23,000
12,000 to 14,000
2,000 to 2,000
to
Total
$12.4 to $13.4
35,000 to 39,000
(Amounts in millions)
Capital Expenditures
2014
2013
$5,083
$4,340
2,539 2,922
1,030 995
Total U.S.
Walmart International
8,652 8,257
4,463 4,641
$13,115 $12,898
(Amounts in millions)
Issue Date
Interest Principal
Rate
Amount
0.600%
1.125%
2.550%
4.000%
1.950%
4.750%
Total
$1,000
1,250
1,750
1,000
1,000
750
$6,750
The aggregate net proceeds from these long-term debt issuances were
approximately $6.7 billion, which were used to pay down and refinance
existing debt and for other general corporate purposes. We also received
additional aggregate net proceeds of approximately $0.4 billion from
other, smaller long-term debt issuances in several of our international
operations, which were used primarily to refinance existing debt.
Dividends
Our total dividend payments were $6.1 billion, $5.4 billion, and $5.0 billion
for fiscal 2014, 2013 and 2012, respectively. On February 20, 2014, the Board
of Directors approved the fiscal 2015 annual dividend at $1.92 per share,
an increase compared to the fiscal 2014 dividend of $1.88 per share. For
fiscal 2015, the annual dividend will be paid in four quarterly installments
of $0.48 per share, according to the following record and payable dates:
Record Date
Payable Date
April 1, 2014
June 2, 2014
September 3, 2014
January 5, 2015
Capital Resources
India Operations
During fiscal 2014, the Company acquired, for $100 million, the
remaining ownership interest in Bharti Walmart Private Limited,
previously a joint venture between Bharti Ventures Limited (Bharti)
and the Company established in 2007, which operated the Companys
wholesale cash & carry business in India. Upon completion of the
transaction, the Company became the sole owner of the cash &
carry business in India. In addition, the Company also terminated
its joint venture, franchise and supply agreements with Bharti Retail
Limited (Bharti Retail), which operates Bhartis retail business in
India, and transferred its investment in that business to Bharti. In
connection with the agreements related to the Bharti retail business,
the Company paid and forgave indebtedness of approximately
$234 million. The amounts paid to complete these transactions are
included in the other investing and other financing categories in the
Companys Consolidated Statements of Cash Flows for fiscal 2014.
Walmart Chile
In September 2013, certain redeemable noncontrolling interest
shareholders exercised put options that required the Company to
purchase a portion of their shares in Walmart Chile at the mutually
agreed upon redemption value to be determined after exercise of
the put options. In fiscal 2014, the Company recorded an increase to
redeemable noncontrolling interest of $1.0 billion, with a corresponding decrease to capital in excess of par value, to reflect the estimated
redemption value of the redeemable noncontrolling interest at
$1.5 billion. Subsequent to the initial exercise, the Company negotiated
with the redeemable noncontrolling interest shareholders to acquire
all of their redeemable noncontrolling interest shares. The Company
completed this transaction in February 2014, after period end, using
its existing cash and bringing its ownership interest in Walmart Chile
to approximately 99.7 percent. The Company has since initiated a
tender offer for the remaining 0.3 percent noncontrolling interest
held by the public in Chile at the same value per share as was paid
to the redeemable noncontrolling interest shareholders. The tender
offer will expire in the first quarter of fiscal 2015.
Rating agency
Commercial paper
Long-term debt
A-1+
P-1
F1+
AA
Aa2
AA
Credit rating agencies review their ratings periodically and, therefore, the
credit ratings assigned to us by each agency may be subject to revision
at any time. Accordingly, we are not able to predict whether our current
credit ratings will remain consistent over time. Factors that could affect
our credit ratings include changes in our operating performance, the
general economic environment, conditions in the retail industry, our
financial position, including our total debt and capitalization, and
changes in our business strategy. Any downgrade of our credit ratings
by a credit rating agency could increase our future borrowing costs or
impair our ability to access capital and credit markets on terms com
mercially acceptable to us. In addition, any downgrade of our current
short-term credit ratings could impair our ability to access the commercial
paper markets with the same flexibility that we have experienced
historically, potentially requiring us to rely more heavily on more expensive
types of debt financing. The credit rating agency ratings are not
recommendations to buy, sell or hold our commercial paper or debt
securities. Each rating may be subject to revision or withdrawal at any
time by the assigning rating organization and should be evaluated
independently of any other rating. Moreover, each credit rating is specific
to the security to which it applies.
To monitor our credit rating and our capacity for long-term financing,
we consider various qualitative and quantitative factors. We monitor the
ratio of our debt-to-total capitalization as support for our long-term
financing decisions. At January 31, 2014 and 2013, the ratio of our debtto-total capitalization was 42.6% and 41.5%, respectively. For the purpose
of this calculation, debt is defined as the sum of short-term borrowings,
long-term debt due within one year, obligations under capital leases
due within one year, long-term debt and long-term obligations under
capital leases. Total capitalization is defined as debt plus total Walmart
shareholders equity. The increase in our debt-to-total capitalization
ratio was primarily driven by changes in working capital and higher
long-term debt balances.
2015
$45,874
$4,103
$6,876
$4,638
$30,257
7,670
7,670
6,291 586 1,077 917 3,711
5,032
4,383
621
20
8
$118,914 $23,240 $15,360 $11,540 $68,774
(1) Long-term debt includes the fair value of our derivatives classified as fair value hedges.
(2) Capital lease obligations includes executory costs and imputed interest related to capital lease obligations that are not yet recorded. Refer to Note 11 for more information.
Market Risk
In addition to the risks inherent in our operations, we are exposed to
certain market risks, including changes in interest rates and fluctuations
in currency exchange rates.
The analysis presented below for each of our market risk sensitive
instruments is based on a hypothetical scenario used to calibrate potential
risk and does not represent our view of future market changes. The effect
of a change in a particular assumption is calculated without adjusting any
other assumption. In reality, however, a change in one factor could cause
a change in another, which may magnify or negate other sensitivities.
Fiscal 2016
Fiscal 2017
Fiscal 2018
Fiscal 2019
Thereafter
Total
Liabilities
Short-term borrowings:
Variable rate
$7,670
$
$
$
$
$
$ 7,670
Weighted-average interest rate 0.1% % % % % % 0.1%
Long-term debt (1):
Fixed rate
$3,309 $4,084 $2,000 $1,000 $3,500 $30,223 $44,116
Weighted-average interest rate 2.3% 2.4% 1.7% 5.4% 3.0% 5.1% 4.3%
Variable rate
$665
$292
$
$
$
$
$957
Weighted-average interest rate 4.3% 0.6% % % % % 3.2%
Interest rate derivatives
Interest rate swaps:
Variable to fixed (2)
$2,665
$292
$
$
$
$
$ 2,957
Weighted-average pay rate
2.7% 0.9% % % % % 2.5%
Weighted-average receive rate 0.3% 0.6% % % % % 0.3%
Fixed to variable
$1,000
$
$
$
$
$
$ 1,000
Weighted-average pay rate
0.3% % % % % % 0.3%
Weighted-average receive rate 3.1% % % % % % 3.1%
(1) T he long-term debt amounts in the table exclude the Companys derivatives classified as fair value hedges.
(2) Forward starting interest rate swaps have been included in the fiscal 2015 maturity category based on when the related hedged forecasted debt issuances, and corresponding
swap terminations, are expected to occur.
As of January 31, 2014, our variable rate borrowings, including the effect
of our commercial paper and interest rate swaps, represented 18% of
our total short-term and long-term debt. Based on January 31, 2014 debt
levels, a 100 basis point change in prevailing market rates would cause
our annual interest costs to change by approximately $78 million.
Foreign Currency Risk
We are exposed to fluctuations in foreign currency exchange rates as a
result of our net investments and operations in countries other than the
United States. For fiscal 2014, movements in currency exchange rates
and the related impact on the translation of the balance sheets of the
Companys subsidiaries in Japan, Canada, Brazil and Africa were the primary cause of a $2.8 billion net loss in the currency translation and other
category of accumulated other comprehensive income (loss). We hedge
a portion of our foreign currency risk by entering into currency swaps
and designating certain foreign-currency-denominated long-term debt
as net investment hedges.
Other Matters
We discuss our existing FCPA investigation and related matters in
the Annual Report on Form 10-K for fiscal 2014, including certain risks
arising therefrom, in Part I, Item 1A of the Form 10-K under the caption
Risk Factors and in Note 10 to our Consolidated Financial Statements,
which is captioned Contingencies, under the sub-caption FCPA
Investigation and Related Matters. We also discuss various legal
proceedings related to the FCPA investigation in Item 3 of the Form 10-K
under the caption Item 3. Legal Proceedings, under the sub-caption
II. Certain Other Proceedings.
Forward-Looking Statements
This Annual Report contains statements that Walmart believes are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. Those statements are
intended to enjoy the protection of the safe harbor for forward-looking
statements provided by that Act. Those forward-looking statements
include statements in Managements Discussion and Analysis of Financial
Condition and Results of Operations: under the caption Overview with
respect to the volatility of currency exchange rates possibly affecting
the results, including net sales and operating income, of Walmart and
its Walmart International segment in the future; under the captions
Company Performance Metrics and Company Performance Metrics
Leverage Operating Income with respect to Walmarts objectives of
growing net sales at a faster rate than operating expenses and growing
operating income at a faster rate than net sales and that strategic growth
investments may cause Walmarts operating expenses to grow at a faster
rate than net sales and resulting in Walmarts operating income growing at
a slower rate than net sales; under the caption Results of Operations
Consolidated Results of Operations regarding the possible fluctuation of
our effective tax rate over future periods; under the caption Results of
Operations Sams Club Segment with respect to the volatility of fuel
prices possibly continuing to affect the operating results of Walmarts
Sams Club segment in the future; under the caption Liquidity and
Capital Resources Cash Flows Provided by Operating Activities Cash
Equivalents and Working Capital, as well as in Note 1 to our Consolidated
Financial Statements, regarding our ability to meet our liquidity needs
through sources other than the cash we hold outside of the United
States, our intention to permanently reinvest cash held outside of the
United States, and our ability to repatriate cash held outside of the
United States; under the caption Liquidity and Capital Resources Cash
Flows Used in Investing Activities Global Expansion Activities and also in
the letter of Walmarts President and CEO to our shareholders, associates
and customers contained in this Annual Report (the CEO Letter) with
respect to Walmarts fiscal 2015 global expansion plans, including a
significant increase in the number of Neighborhood Markets and other
small format stores, growing our retail square feet and expanding our
e-commerce capabilities and our plans to finance that expansion primarily
through cash flows and future debt financings, with respect to Walmarts
estimated range of capital expenditures (including e-commerce capital
expenditures) in fiscal 2015 for the Walmart U.S. segment, the Walmart
International segment, the Sams Club segment, in the other unallocated
category and in total, with respect to the estimated/projected growth
in retail square feet in total and by reportable segment in fiscal 2015;
under the caption Liquidity and Capital Resources Cash Flows Used in
Investing Activities Pending Transactions regarding the expectation that
the Company will record a net gain on the sale of the Vips restaurant
operations by Walmex; under the caption Liquidity and Capital
Resources Cash Flows Used in Financing Activities Dividends, as well
as in Note 15 to our Consolidated Financial Statements and elsewhere
in this Annual Report under the caption Dividends payable per share,
regarding the payment of the dividend on our shares of common stock
in fiscal 2015, the expected payment of certain installments of the dividend on our shares of common stock on certain dates in fiscal 2015 and
the expected total amount of the dividend per share to be paid in fiscal
The foregoing list of factors that may affect our business operations and
financial performance is not exclusive. Other factors and unanticipated
events could adversely affect our business operations and financial
performance. We discuss certain of these matters more fully, as well as
certain risk factors that may affect our business operations, financial
condition, results of operations and liquidity in other of our filings with
the Securities and Exchange Commission (the SEC), including our
Annual Report on Form 10-K under the heading Item 1A. Risk Factors.
We filed our Annual Report on Form 10-K for the fiscal year ended
January 31, 2014, with the SEC on March 21, 2014. The forward-looking
statements described above are made based on knowledge of our
business and the environment in which we operate and assumptions
that we believe to be reasonable at the time such forward-looking
statements are made. However, because of the factors described and
listed above, as well as other factors, or as a result of changes in facts,
assumptions not being realized or other circumstances, actual results
may materially differ from anticipated results described or implied in
these forward-looking statements. We cannot assure the reader that the
results or developments expected or anticipated by us will be realized
or, even if substantially realized, that those results or developments will
result in the expected consequences for us or affect us, our business or
our operations in the way we expect. You are urged to consider all of
these risks, uncertainties and other factors carefully in evaluating the
forward-looking statements and not to place undue reliance on such
forward-looking statements. The forward-looking statements included
in this Annual Report speak only as of the date of this report, and we
undertake no obligation to update these forward-looking statements to
reflect subsequent events or circumstances, except as may be required
by applicable law.
Revenues:
Net sales
$473,076 $465,604 $443,416
Membership and other income
3,218 3,047 3,093
Total revenues
476,294 468,651 446,509
Costs and expenses:
Cost of sales
358,069 352,297 334,993
Operating, selling, general and administrative expenses
91,353 88,629 85,025
Operating income
26,872 27,725 26,491
Interest:
Debt
2,072 1,977 2,034
Capital leases
263 272 286
Interest income
(119) (186) (161)
Interest, net
$15,699
$ 16,022
$4.87
$5.03
$4.55
0.03 0.01 (0.01)
$4.54
$4.85
$5.01
$4.53
0.03 0.01 (0.01)
$5.04
$5.02
$4.52
$1.59
$1.46
(Amounts in millions)
2014 2013 2012
(2,409)
823 (2,056)
As of January 31,
(Amounts in millions)
2014 2013
ASSETS
Current assets:
Cash and cash equivalents
Receivables, net
Inventories
Prepaid expenses and other
Current assets of discontinued operations
Total current assets
Property and equipment:
Property and equipment
Less accumulated depreciation
Property and equipment, net
Property under capital leases:
Property under capital leases
Less accumulated amortization
Goodwill
Other assets and deferred charges
$7,281
$7,781
6,677 6,768
44,858 43,803
1,909 1,551
460 37
61,185 59,940
173,089 165,825
(57,725) (51,896)
115,364 113,929
5,589 5,899
(3,046) (3,147)
2,543 2,752
19,510 20,497
6,149 5,987
Total assets
$204,751 $203,105
$7,670
$6,805
37,415 38,080
18,793 18,808
966 2,211
4,103 5,587
309 327
89
69,345 71,818
Long-term debt
Long-term obligations under capital leases
Deferred income taxes and other
Redeemable noncontrolling interest
41,771 38,394
2,788 3,023
8,017 7,613
1,491 519
323 332
2,362 3,620
76,566 72,978
(2,996) (587)
76,255 76,343
5,084 5,395
Total equity
Total liabilities, redeemable noncontrolling interest and equity
81,339 81,738
$204,751 $203,105
3,516
$352 $3,577
Accumulated Total
Other
Walmart Nonredeemable
Comprehensive Shareholders
Noncontrolling
Total
Income (Loss)
Equity
Interest
Equity
$63,967
15,699
$646
$68,542
15,699
$2,705
627
Redeemable
Noncontrolling
Interest
$71,247 $ 408
16,326
61
(2,056)
(2,056)
(660)
(2,716)
(66)
(113)
(11)
(229)
(5,048)
(5,930)
(5,048)
(6,170)
(5,048)
(6,170)
15
344
348
1,988
(214)
1,988
134
(1,410)
71,315
16,999
4,446
684
75,761 404
17,683
73
823
823
138
961
51
(11)
(357)
(5,361)
(7,341)
(5,361)
(7,709)
(5,361)
(7,709)
285
(10)
276
469
(66)
(9)
3,314
332
3,620
72,978
16,022
(587)
76,343
16,022
5,395
595
81,738
16,617
519
78
(2,409)
(2,409)
(311)
(2,720)
(66)
(87)
(9)
(294)
(6,139)
(6,254)
(6,139)
(6,557)
(6,139)
(6,557)
(1,019)
55
(41)
(1,019)
14
(595)
3,233
$323 $2,362
$(2,996)
$76,255
$76,566
469
(342)
$5,084
(1,019) 1,019
(581)
(59)
$81,339 $1,491
147046_L01_FIN.indd 38
4/10/14 3:15 PM
(Amounts in millions)
2014 2013 2012
$16,695
$17,756
$16,387
(144) (52) 21
$7,281
$7,781
$6,550
$8,641
$7,304
$5,899
2,362 2,262 2,346
cash equivalents at January 31, 2014 and 2013, respectively, $5.8 billion and
$5.2 billion, respectively, were held outside of the U.S. and were generally
utilized to support liquidity needs in the Companys non-U.S. operations.
The Company employs financing strategies (e.g., global funding structures)
in an effort to ensure that cash can be made available in the country in
which it is needed with the minimum cost possible. Management does
not believe it will be necessary to repatriate cash and cash equivalents
held outside of the U.S. and anticipates its domestic liquidity needs will
be met through other funding sources (ongoing cash flows generated
from operations, external borrowings or both). Accordingly, management
intends, with only certain exceptions, to continue to indefinitely reinvest
the Companys cash and cash equivalents held outside of the U.S. in its
foreign operations. When the income earned (either from operations or
through global funding structures) and indefinitely reinvested outside of
the U.S. is taxed at local country tax rates, which are generally lower than
the U.S. statutory rate, the Company realizes an effective tax rate benefit.
If the Companys intentions with respect to reinvestment were to change,
most of the amounts held within the Companys foreign operations could
be repatriated to the U.S., although any repatriation under current U.S. tax
laws would be subject to U.S. federal income taxes, less applicable foreign
tax credits. As of January 31, 2014 and 2013, cash and cash equivalents of
approximately $1.9 billion may not be freely transferable to the U.S. due
to local laws or other restrictions. Management does not expect local laws,
other limitations or potential taxes on anticipated future repatriations of
cash amounts held outside of the U.S. to have a material effect on the
Companys overall liquidity, financial condition or results of operations.
Receivables
Receivables are stated at their carrying values, net of a reserve for
doubtful accounts. Receivables consist primarily of amounts due from:
insurance companies resulting from pharmacy sales;
banks for customer credit and debit cards and electronic bank transfers
that take in excess of seven days to process;
consumer financing programs in certain international operations;
suppliers for marketing or incentive programs; and
real estate transactions.
The Walmart International segment offers a limited number of consumer
credit products, primarily through its financial institutions in select
countries. The receivable balance from consumer credit products was
$1.3 billion, net of a reserve for doubtful accounts of $119 million at
January 31, 2014, compared to a receivable balance of $1.2 billion, net
of a reserve for doubtful accounts of $115 million at January 31, 2013.
These balances are included in receivables, net, in the Companys
Consolidated Balance Sheets.
Inventories
The Company values inventories at the lower of cost or market as
determined primarily by the retail method of accounting, using the
last-in, first-out (LIFO) method for substantially all of the Walmart U.S.
segments inventories. The Walmart International segments inventories
are primarily valued by the retail method of accounting, using the first-in,
first-out (FIFO) method. The retail method of accounting results in
inventory being valued at the lower of cost or market since permanent
markdowns are immediately recorded as a reduction of the retail value
of inventory. The Sams Club segments inventories are valued based on
the weighted-average cost using the LIFO method. At January 31, 2014
Land
Buildings and improvements
Fixtures and equipment
Transportation equipment
Construction in progress
Total
Balances as of
February 1, 2012 $439 $19,899 $313 $20,651
Changes in currency
translation and other
(65)
(65)
Purchase accounting
adjustments for
prior fiscal year
acquisitions (1)
4 (532) (528)
Acquisitions (2)
439 439
Balances as of
January 31, 2013 443 19,741 313 20,497
Changes in currency
translation and other
(1,000)
(1,000)
Acquisitions (2)
8
5 13
Balances as of
January 31, 2014
$451
$18,746
$313
$19,510
(1) F iscal 2013 purchase accounting adjustments primarily relate to the finalization of
the purchase price allocation for the fiscal 2012 acquisition of Massmart.
(2) Goodwill recorded for fiscal 2014 and 2013 acquisitions relates to several acquisitions
that are not significant, individually or in the aggregate, to the Companys Consolidated
Financial Statements.
Revenue Recognition
Sales
The Company recognizes sales revenue, net of sales taxes and estimated
sales returns, at the time it sells merchandise to the customer.
Membership Fee Revenue
The Company recognizes membership fee revenue both in the United
States and internationally over the term of the membership, which is
t ypically 12 months. The following table summarizes membership fee
activity for fiscal 2014, 2013 and 2012:
(Amounts in millions)
2014 2013 2012
Currency Translation
The assets and liabilities of all international subsidiaries are translated
from the respective local currency to the U.S. dollar using exchange rates
at the balance sheet date. Related translation adjustments are recorded
as a component of accumulated other comprehensive income (loss). The
income statements of international subsidiaries are translated from the
respective local currencies to the U.S. dollar using average exchange
rates for the period covered by the income statements.
Reclassifications
Certain reclassifications have been made to previous fiscal year amounts
and balances to conform to the presentation in the current fiscal year.
These reclassifications did not impact consolidated operating income or
net income. Additionally, certain segment asset and expense allocations
have been reclassified among segments in the current period. See
Note 14 for further discussion of the Companys segments.
Numerator
Income from continuing operations
Less income from continuing
operations attributable to
noncontrolling interest
Income from continuing operations
attributable to Walmart
Denominator
Weighted-average common shares
outstanding, basic
Dilutive impact of stock options
and other share-based awards
Weighted-average common shares
outstanding, diluted
Income per common share
from continuing operations
attributable to Walmart
Basic
Diluted
3 Shareholders Equity
Share-Based Compensation
The Company has awarded share-based compensation to associates
and nonemployee directors of the Company. The compensation expense
recognized for all plans was $388 million, $378 million and $355 million
for fiscal 2014, 2013 and 2012, respectively. Share-based compensation
expense is included in operating, selling, general and administrative
expenses in the Companys Consolidated Statements of Income. The
total income tax benefit recognized for share-based compensation was
$145 million, $142 million and $134 million for fiscal 2014, 2013 and 2012,
respectively. The following table summarizes the Companys share-based
compensation expense by award type:
(Amounts in millions)
2014 2013 2012
Stock Options(1)
Weighted-Average Weighted-Average
Grant-Date Grant-Date
Weighted-Average
Fair Value Fair Value
Exercise Price
(Shares in thousands)
Shares
Per Share
Shares
Per Share
Shares
Per Share
12,598
$57.37
17,839
$49.79
10,240
$47.58
3,688 76.05 5,095 77.75 1,846 56.63
(2,445) 55.31 (3,998) 55.33 (3,421) 48.88
(3,890)
61.32
(1,151)
60.38
(415)
59.43
9,951
$55.87
8,250
$48.47
$63.26
17,785
3,119
$48.45
(1) I ncludes stock option awards granted under the Plan, the CSOP and the Sharesave Plan.
(2) Assumes payout rate at 100% for Performance Share Awards.
(Amounts in millions)
The fair value of each stock option award is estimated on the date of
grant using the Black-Scholes-Merton option valuation model that uses
various assumptions for inputs. The Company uses expected volatilities
and risk-free interest rates that correlate with the expected term of the
option when estimating an options fair value. The following table provides
the weighted-average assumptions used to estimate the fair values of
the Companys stock options granted in fiscal 2014, 2013 and 2012:
(1) Expected dividend yield is based on the anticipated dividends over the vesting period.
(2) Expected volatility is based on historical volatility of the Companys stock.
(Amounts in millions)
(3) Risk-free interest rate is based on the U.S. Treasury yield curve at the time of the grant.
(4) Expected life in years is based on historical exercise and expiration activity of grants
with similar vesting periods.
$1,226
(2,032)
$(640)
43
$646
(2,056)
$ 60
(67)
Total
47
(2,769)
129
194
13
(763)
149
4
(587)
(2,426)
17
$(2,722)
$336
$(610)
$(2,996)
Amounts reclassified from accumulated other comprehensive income (loss) for derivative instruments are generally included in interest, net, in the
Companys Consolidated Statements of Income, and the amounts related to the minimum pension liability are included in operating, selling, general
and administrative expenses in the Companys Consolidated Statements of Income.
The Companys unrealized net gains and losses on net investment hedges, included in the currency translation and other category of accumulated
other comprehensive income (loss), were not significant as of January 31, 2014 or January 31, 2013.
5 Accrued Liabilities
The Companys accrued liabilities consist of the following:
(Amounts in millions)
As of January 31,
2014 2013
$4,652
$5,059
3,477 3,373
2,554 2,851
8,110 7,525
$18,793 $18,808
(1) A
ccrued wages and benefits include accrued wages, salaries, vacation, bonuses and other incentive plans.
(2) Self-insurance consists of all insurance-related liabilities, such as workers compensation, general liability, vehicle liability, property liability and employee-related
health care benefits.
(3) Accrued taxes include accrued payroll, value added, sales and miscellaneous other taxes.
(4) Other accrued liabilities consist of various items such as maintenance, utilities, advertising and interest.
(Amounts in millions)
The Company has various lines of credit, committed with 24 financial institutions, totaling $17.3 billion as of January 31, 2014 and with 27 financial
institutions, totaling $18.1 billion as of January 31, 2013. The lines of credit, including drawn and undrawn amounts, are summarized in the following table:
(Amounts in millions)
Drawn Undrawn
$ 6,000
$
$ 6,000
$6,258
$
$6,258
9,400 9,400 10,000
10,000
1,883 1,836 47 1,871 1,868 3
Total
(1)
(1) In June 2013, the Company renewed and extended its existing five-year credit facility, which is used to support its commercial paper program.
(2) In June 2013, the Company renewed and extended its existing 364-day revolving credit facility, which is used to support its commercial paper program.
(3) In June 2013, the Company renewed the stand-by letters of credit, which are used to support various potential and actual obligations.
The committed lines of credit mature at various times between June 2014 and June 2018, carry interest rates generally ranging between LIBOR plus
10 basis points and LIBOR plus 75 basis points, and incur commitment fees ranging between 1.5 and 4.0 basis points. In conjunction with the lines of
credit listed in the table above, the Company has agreed to observe certain covenants, the most restrictive of which relates to the maximum amount
of secured debt.
Additionally, the Company had trade letters of credit outstanding totaling $2.8 billion and $2.7 billion at January 31, 2014 and 2013, respectively.
(Amounts in millions)
Unsecured debt
Fixed
Variable
Maturity Dates
By Fiscal Year
Amount
2015-2044
2015
Average Average
Rate (1)
Amount Rate (1)
Fixed
2031-2039
Variable
Fixed
Variable
2015-2021
2015-2016
$41,771 $38,394
(1) T he average rate represents the weighted-average stated rate for each corresponding debt category, based on year-end balances and year-end interest rates. Interest costs are
also impacted by certain derivative financial instruments described in Note 8.
(2) A portion of other debt at January 31, 2014 and 2013 includes secured debt in the amount of $572 million and $627 million, respectively, which was collateralized by property
that had an aggregate carrying amount of approximately $471 million and $599 million, respectively.
At January 31, 2014 and 2013, the Company had $500 million in debt with
embedded put options. The issuance of money market puttable reset
securities in the amount of $500 million is structured to be remarketed in
connection with the annual reset of the interest rate. If, for any reason,
the remarketing of the notes does not occur at the time of any interest
rate reset, the holders of the notes must sell, and the Company must
repurchase, the notes at par. Accordingly, this issuance has been classified
as long-term debt due within one year in the Companys Consolidated
Balance Sheets. Annual maturities of long-term debt during the next
five years and thereafter are as follows:
(Amounts in millions)
Annual
Fiscal Year
Maturity
2015
$
4,103
2016
4,480
2017
2,396
2018
1,107
2019
3,531
Thereafter
30,257
Total
$45,874
Debt Issuances
Information on significant long-term debt issued during fiscal 2014,
is as follows:
Issue Date
Maturity
Date
Interest Principal
Rate
Amount
0.600%
1.125%
2.550%
4.000%
1.950%
4.750%
$1,000
1,250
1,750
1,000
1,000
750
Total $6,750
The aggregate net proceeds from these long-term debt issuances were
approximately $6.7 billion, which were used to pay down and refinance
existing debt and for other general corporate purposes. The Company
also received additional aggregate net proceeds of approximately
$0.4 billion from other, smaller long-term debt issuances by several
of its international operations, which were used primarily to refinance
existing debt.
$1,000
$5
$3,445
Fair Value
$60
Fair Value
Fair Value
The Company is also a party to receive fixed-rate, pay fixed-rate crosscurrency interest rate swaps to hedge the currency exposure associated
with the forecasted payments of principal and interest of certain non-U.S.
denominated debt. The swaps are designated as cash flow hedges of
the currency risk related to payments on the non-U.S. denominated
debt. The effective portion of changes in the fair value of derivatives
designated as cash flow hedges of foreign exchange risk is recorded in
accumulated other comprehensive income (loss) and is subsequently
reclassified into earnings in the period that the hedged forecasted
transaction affects earnings. The hedged items are recognized foreign
currency-denominated liabilities that are remeasured at spot exchange
rates each period, and the assessment of effectiveness (and measurement of any ineffectiveness) is based on total changes in the related
derivatives cash flows. As a result, the amount reclassified into earnings
each period includes an amount that offsets the related transaction gain
or loss arising from that remeasurement and the adjustment to earnings
for the periods allocable portion of the initial spot-forward difference
associated with the hedging instrument. These cash flow instruments
will mature on dates ranging from September 2029 to March 2034.
The Company also uses forward starting receive variable-rate, pay
fixed-rate swaps (forward starting swaps), to hedge its exposure to
the variability in future cash flows due to changes in the LIBOR swap rate
for 10- and 30-year debt issuances forecasted to occur in the future.
Amounts reported in accumulated other comprehensive income (loss)
related to these derivatives will be reclassified from accumulated other
comprehensive income (loss) to earnings as interest expense is incurred
on the forecasted hedged fixed-rate debt, adjusting interest expense to
reflect the fixed-rate entered into by the forward starting swaps. These
cash flow instruments hedge forecasted interest payments to be made
through May 2044. These forward starting swaps will be terminated on
the day the hedged forecasted debt issuances occur, but no later than
October 31, 2014, if the hedged forecasted debt issuances do not occur.
The Company terminated forward starting swaps with an aggregate
notional amount of $2.5 billion by making a cash payment to the related
counterparties of $74 million in connection with the April 2013 debt
issuances described in Note 6. The $74 million loss was recorded in
accumulated other comprehensive income (loss) and will be reclassified
to earnings over the life of the related debt, effectively adjusting
interest expense to reflect the fixed-rate entered into by the forward
starting swaps.
(Amounts in millions)
Fair Value
Net Investment
Cash Flow
Instruments Instruments Instruments
Fair Value
Net Investment
Cash Flow
Instruments Instruments Instruments
Derivative instruments
Prepaid expenses and other
Other assets and deferred charges
$ 5
$
$
97 619
$29
$
$
31 223 327
$5
$60
$97
$619
$223
$327
Accrued liabilities
Deferred income taxes and other
$
$
$ 1
1
$
$
$4
91
$ 2
$ 95
$
$ 973
$
5,095
$
$818
$
6,145
Nonderivative hedge
liability subtotals
$6,068
$6,963
Gains and losses related to the Companys derivatives primarily relate to interest rate hedges, which are included in interest, net, in the Companys
Consolidated Statements of Income. Amounts related to the Companys derivatives expected to be reclassified from accumulated other comprehensive
income (loss) to net income during the next 12 months are not significant.
9 Taxes
(Amounts in millions)
2014 2013 2012
Current:
U.S. federal
U.S. state and local
International
Total current tax provision
Deferred:
U.S. federal
U.S. state and local
International
Total deferred tax expense (benefit)
Total provision for income taxes
(Amounts in millions)
2014 2013 2012
Deferred Taxes
The significant components of the Companys deferred tax account
balances are as follows:
January 31,
(Amounts in millions)
2014 2013
6,450 5,687
9,763 8,899
January 31,
(Amounts in millions)
2014 2013
Asset subtotals
1,973 1,277
Liabilities:
Accrued liabilities
Deferred income taxes and other
176 116
5,110 4,373
5,286 4,489
Liability subtotals
$3,313 $3,212
Unremitted Earnings
United States income taxes have not been provided on accumulated
but undistributed earnings of the Companys international subsidiaries
of approximately $21.4 billion and $19.2 billion as of January 31, 2014
and 2013, respectively, as the Company intends to permanently reinvest
these amounts outside of the United States. However, if any portion were
to be distributed, the related U.S. tax liability may be reduced by foreign
income taxes paid on those earnings. Determination of the unrecognized
deferred tax liability related to these undistributed earnings is not
practicable because of the complexities with its hypothetical calculation.
The Company provides deferred or current income taxes on earnings of
international subsidiaries in the period that the Company determines it
will remit those earnings.
Net Operating Losses, Tax Credit Carryforwards
and Valuation Allowances
At January 31, 2014, the Company had net operating loss and capital loss
carryforwards totaling approximately $6.1 billion. Of these carryforwards,
approximately $3.6 billion will expire, if not utilized, in various years
through 2024. The remaining carryforwards have no expiration. At
January 31, 2014, the Company had foreign tax credit carryforwards of
$1.8 billion, which will expire in various years through 2024, if not utilized.
The recoverability of these future tax deductions and credits is evaluated
by assessing the adequacy of future expected taxable income from all
sources, including taxable income in prior carryback years, reversal of
taxable temporary differences, forecasted operating earnings and
available tax planning strategies. To the extent management does not
consider it more likely than not that a deferred tax asset will be realized,
a valuation allowance is established. If a valuation allowance has been
established and management subsequently determines that it is more
likely than not that the deferred tax assets will be realized, the valuation
allowance is released.
Other Taxes
The Company is subject to tax examinations for payroll, value added,
sales-based and other non-income taxes. A number of these examinations
are ongoing in various jurisdictions, including Brazil. In certain cases,
the Company has received assessments from the taxing authorities in
connection with these examinations. Where a probable loss has occurred,
the Company has made accruals, which are reflected in the Companys
Consolidated Financial Statements. While the possible losses or
range of possible losses associated with these matters are individually
immaterial, a group of related matters, if decided adversely to the
Company, could result in a liability material to the Companys Consolidated
Financial Statements.
10 Contingencies
(Amounts in millions)
2014 2013 2012
$818
$611
$795
41 88 87
(112) (232) (162)
133 431 56
(117) (80) (161)
(4)
$763
$818
$611
Legal Proceedings
The Company is involved in a number of legal proceedings. The Company
has made accruals with respect to these matters, where appropriate,
which are reflected in the Companys Consolidated Financial Statements.
For some matters, a liability is not probable or the amount cannot be
reasonably estimated, and therefore an accrual has not been made.
However, where a liability is reasonably possible and material, such matters
have been disclosed. The Company may enter into discussions regarding
settlement of these matters and may enter into settlement agreements if
it believes settlement is in the best interest of the Companys shareholders.
Unless stated otherwise, the matters, or groups of related matters,
discussed below, if decided adversely to or settled by the Company,
individually or in the aggregate, may result in a liability material to the
Companys financial condition or results of operations.
Wage-and-Hour Class Action: The Company is a defendant in
Braun/Hummel v. Wal-Mart Stores, Inc., a class-action lawsuit commenced
in March 2002 in the Court of Common Pleas in Philadelphia, Pennsylvania.
The plaintiffs allege that the Company failed to pay class members for all
hours worked and prevented class members from taking their full meal
and rest breaks. On October 13, 2006, a jury awarded back-pay damages
to the plaintiffs of approximately $78 million on their claims for off-theclock work and missed rest breaks. The jury found in favor of the Company
on the plaintiffs meal-period claims. On November 14, 2007, the trial
judge entered a final judgment in the approximate amount of $188 million,
which included the jurys back-pay award plus statutory penalties, prejudgment interest and attorneys fees. By operation of law, post-judgment
interest accrues on the judgment amount at the rate of six percent per
annum from the date of entry of the judgment, which was November 14,
2007, until the judgment is paid, unless the judgment is set aside on
appeal. On December 7, 2007, the Company filed its Notice of Appeal.
The Company filed its opening appellate brief on February 17, 2009,
plaintiffs filed their response brief on April 20, 2009, and the Company
11 Commitments
The Company has long-term leases for stores and equipment. Rentals
(including amounts applicable to taxes, insurance, maintenance, other
operating expenses and contingent rentals) under operating leases
and other short-term rental arrangements were $2.8 billion, $2.6 billion
and $2.4 billion in fiscal 2014, 2013 and 2012, respectively.
Operating Capital
Leases
Leases
2015
$1,734
$586
2016
1,632
558
2017
1,462
519
2018
1,314
479
2019
1,192
438
Thereafter 9,836 3,711
Total minimum rentals $17,170 $6,291
Less estimated executory costs
60
Net minimum lease payments
Less imputed interest
6,231
3,134
12 Retirement-Related Benefits
The Company offers 401(k) plans for associates in the United States
and Puerto Rico, under which associates generally become participants
following one year of employment. Under these plans, the Company
matches 100% of participant contributions up to 6% of annual eligible
earnings. The matching contributions immediately vest at 100% for each
associate. Participants can contribute up to 50% of their pretax earnings,
but not more than the statutory limits. Participants age 50 or older may
defer additional earnings in catch-up contributions up to the maximum
statutory limits.
Associates in international countries who are not U.S. citizens are covered
by various defined contribution post-employment benefit arrangements.
These plans are administered based upon the legislative and tax
requirements in the countries in which they are established.
Additionally, the Companys subsidiaries in the United Kingdom (Asda)
and Japan have sponsored defined benefit pension plans. The plan in
the United Kingdom was underfunded by $69 million and $346 million
at January 31, 2014 and 2013, respectively. The plan in Japan was underfunded by $281 million and $338 million at January 31, 2014 and 2013,
(Amounts in millions)
2014 2013 2012
14 Segments
The Company is engaged in the operation of retail, wholesale and other
units located in the U.S., Africa, Argentina, Brazil, Canada, Central
America, Chile, China, India, Japan, Mexico and the United Kingdom.
The Companys operations are conducted in three reportable business
segments: Walmart U.S., Walmart International and Sams Club. The
Company defines its segments as those operations whose results its chief
operating decision maker (CODM) r egularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate
and identify revenues for each of these individual products and services.
The Walmart U.S. segment includes the Companys mass merchant concept in the U.S. operating under the Walmart or Wal-Mart brands, as
well as walmart.com. The Walmart International segment consists of the
Companys operations outside of the U.S., including various retail websites. The Sams Club segment includes the warehouse membership
clubs in the U.S., as well as samsclub.com. Corporate and support consists of corporate overhead and other items not allocated to any of the
Companys segments.
The Company measures the results of its segments using, among other
measures, each segments net sales and operating income, which
includes certain corporate overhead allocations. From time to time, the
Company revises the measurement of each segments operating
income, including any corporate overhead allocations, as determined by
the information regularly reviewed by its CODM. When the measurement of a segment changes, previous period amounts and balances are
reclassified to be comparable to the current periods presentation.
Walmart
International
SamsClub
Corporate and
Support
Consolidated
$473,076
26,872
(2,216)
$ 24,656
Total assets
Depreciation and amortization
Capital Expenditures
$6,583
907
1,203
$204,751
8,870
13,115
$465,604
27,725
(2,063)
$ 25,662
Total assets
Depreciation and amortization
Capital Expenditures
$7,697
670
1,396
$203,105
8,478
12,898
$443,416
26,491
(2,159)
$ 24,332
Total assets
Depreciation and amortization
Capital Expenditures
$193,406
8,130
13,510
$ 98,745
4,660
6,378
$ 96,234
4,586
5,994
$ 93,143
4,557
6,226
(Amounts in millions)
Total revenues
U.S. operations
Non-U.S. operations
Total revenues
Long-lived assets
U.S. operations
Non-U.S. operations
$ 85,370
2,658
4,463
$ 85,695
2,605
4,640
$ 81,289
2,438
5,274
$14,053
645
1,071
$13,479
617
868
$12,824
595
823
$6,150
540
1,187
15 Subsequent Event
Dividends Declared
On February 20, 2014, the Board of Directors approved the fiscal 2015
annual dividend at $1.92 per share, an increase compared to the fiscal
2014 dividend of $1.88 per share. For fiscal 2015, the annual dividend
will be paid in four quarterly installments of $0.48 per share, according
to the following record and payable dates:
Record Date
Payable Date
April 1, 2014
June 2, 2014
September 3, 2014
January 5, 2015
Total revenues
Net sales
Cost of sales
Income from continuing operations
Consolidated net income
Consolidated net income attributable to Walmart
$114,071
113,313
85,991
3,932
3,944
3,784
$116,829
116,101
87,420
4,205
4,216
4,069
$115,688
114,876
86,687
3,870
3,885
3,738
$129,706
128,786
97,971
4,544
4,650
4,431
$476,294
473,076
358,069
16,551
16,695
16,022
1.14
1.24
1.14
1.35
4.87
0.01
0.01
0.02
0.03
1.15
1.24
1.15
1.37
4.90
1.14
1.23
1.14
1.34
4.85
0.01
0.02
0.03
1.14
1.24
1.14
1.36
4.88
Total revenues
Net sales
Cost of sales
Income from continuing operations
Consolidated net income
Consolidated net income attributable to Walmart
$112,901
112,155
85,145
3,882
3,893
3,741
$114,174
113,412
85,611
4,150
4,162
4,017
$113,800
113,077
85,470
3,809
3,825
3,635
$127,776
126,960
96,071
5,863
5,876
5,606
$468,651
465,604
352,297
17,704
17,756
16,999
1.10
1.18
1.08
1.68
5.03
0.01
0.01
1.10
1.19
1.08
1.68
5.04
1.09
1.18
1.07
1.67
5.01
0.01
0.01
1.09
1.18
1.08
1.67
5.02
(1) T he sum of quarterly income per common share attributable to Walmart data may not agree to annual amounts due to rounding.
Rogers, Arkansas
March 21, 2014
principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of the companys assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures
may deteriorate.
In our opinion, Wal-Mart Stores, Inc. maintained, in all material respects,
effective internal control over financial reporting as of January 31, 2014,
based on the COSO criteria.
We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated
balance sheets of Wal-Mart Stores, Inc. as of January 31, 2014 and 2013,
and related consolidated statements of income, comprehensive income,
shareholders equity and cash flows for each of the three years in the
period ended January 31, 2014 and our report dated March 21, 2014
expressed an unqualified opinion thereon.
Rogers, Arkansas
March 21, 2014
C. Douglas McMillon
President and Chief Executive Officer
United States
The Walmart U.S. and Sams Club segments comprise the Companys
operations in the United States. As of January 31, 2014, unit counts for
Walmart U.S. and Sams Club are summarized by format for each state
or territory as follows:
Walmart U.S.
Sams Club
Neighborhood
Markets and
Discount
other small
State or Territory
Supercenters Stores
formats
Clubs
Washington 46 12
3
3 64
Washington D.C.
2
2
West Virginia
38
1
5
44
Wisconsin 78 9 5 12
104
Wyoming 10 2
12
Puerto Rico
12
6
27
11
56
U.S. Total 3,288 508 407 632
4,835
Grand
Total
Alabama
95
3
12
13 123
Alaska
8
2
3 13
Arizona
78
3
25
15 121
Arkansas
73
9
19
7 108
California 106 96 49 33
284
Colorado
66
5
14
15 100
Connecticut 10 24
2
3 39
Delaware
6
3
1 10
Florida
207 16 51 45
319
Georgia
143
3
13
23 182
Hawaii
9
2 11
Idaho
21 1 1 1
24
Illinois
128
26
6
31 191
Indiana 92 9 6 16
123
Iowa
56
3
8 67
Kansas
56
4 12
8 80
Kentucky 76 8 8 9
101
Louisiana 83 2 7 14
106
Maine
19
3
3 25
Maryland
25 22
12 59
Massachusetts 23 24
3 50
Michigan
83
8
26 117
Minnesota
61
7
13 81
Mississippi 62 4 1 7
74
Missouri
107
12
6
17 142
Montana 13 2
15
Nebraska
34
6
4 44
Nevada
30
2 11
7 50
New Hampshire
15
12
4
31
New Jersey
21
36
10
67
New Mexico
35 2 4 7
48
New York
74
25
2
16
117
North Carolina
137
6
21
23
187
North Dakota
12
1
3
16
Ohio
138
7
29 174
Oklahoma
77
9
19
11 116
Oregon 26 7 9
42
Pennsylvania 110
24
23 157
Rhode Island
5
4
1
10
South Carolina
80
2
12
94
South Dakota
13 2
15
Tennessee 111 2 6 16
135
Texas
345 27 50 77
499
Utah
40
5
8 53
Vermont
5 5
Virginia 102 6 4 16
128
International
Retail
Wholesale
Africa
Argentina
Brazil
Canada
Central America (4)
Chile
China
India
Japan
Mexico (5)
United Kingdom
285 94 379
104 104
468 76 12 556
389 389
660 1 661
351 2 27 380
395 10 405
20 20
374 64 438
2,033 156 10 2,199
574
2
576
International total
(3)
(1) W
almart International unit counts, with the exception of Canada, are stated
as of December 31, 2013, to correspond with the balance sheet date of the related
geographic market. Canada unit counts are stated as of January 31, 2014.
(2) Other includes restaurants, drugstores and convenience stores operating under
varying banners in Brazil, Chile, Japan, Mexico and the United Kingdom.
(3) Africa unit counts by country are Botswana (11), Ghana (1), Lesotho (3), Malawi (2),
Mozambique (7), Namibia (3), Nigeria (2), South Africa (346), Swaziland (1),
Tanzania (1), Uganda (1) and Zambia (1).
(4) Central America unit counts by country are Costa Rica (214), El Salvador (83),
Guatemala (209), Honduras (75) and Nicaragua (80).
(5) M
exico unit counts exclude 360 units of the Vips restaurant business classified
as discontinued operations as of January 31, 2014. The Company has entered into
an agreement to sell the operations of the Vips restaurant business, subject to
regulatory approval.
For fiscal 2015, dividends will be paid based on the following schedule:
April 1, 2014
$0.48
June 2, 2014
$0.48
September 3, 2014
$0.48
January 5, 2015
$0.48
Annual meeting
Our Annual Meeting of Shareholders will be held on Friday, June 6, 2014,
at 7:00 a.m. (Central Time) in the Bud Walton Arena on the University of
Arkansas campus, Fayetteville, Arkansas.
For fiscal 2013, dividends were paid based on the following schedule:
April 4, 2012
$0.3975
June 4, 2012
$0.3975
September 4, 2012
$0.3975
December 27, 2012
$0.3975
$400
$350
$300
$150
The high and low market price per share for the Companys common
stock in fiscal 2014 and 2013 were as follows:
$100
$250
$200
2014 2013
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
High Low
2015
1st Quarter
(1) Through March 21, 2014.
2009
2010
2011
2012
2013
2014
High Low
The high and low market price per share for the Companys common
stock for the first quarter of fiscal 2015, were as follows:
$ 50
Fiscal Years
(1)
$450
High
Low
$77.02 $72.27
Shareholders
As of March 18, 2014, there were 255,758 holders of record of Walmarts
common stock.
Listing
2.2M
dedicated
associates
globally
4 of 5
190,000
U.S. store/club associates
promoted in scal 2014
5.11 acre
of forestland preserved
via managed forestry
983 fewer
trees consumed
via recycling
129,537 kWh
46,835 kWh
459,333 fewer
gallons of water
consumed
NT
RI
ED US
IN
10
%
Walmart 2014 Annual
Report 2
W
E
0
associates
have 10+ years
of service
GY
300K
The minimized environmental footprint of this report is the result of an extensive, collaborative effort of Walmart and our supply chain
partners. The environmental and social impact continues to be an important consideration. It is printed on paper from well-managed
forests containing recycled PCW fiber that is Elementally Chlorine Free (ECF). It is printed using 100 percent renewable wind power
(RECs), along with environmental manufacturing principles that were utilized in the printing process. These practices include environmentally responsible procurement, lean manufacturing, green chemistry principles, the recycling of residual materials and reduced
volatile organic compound inks and coatings.
IND EN
147046_L01_CVR.indd 2
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So many ways to
Save money.
Live better.
Associate
career opportunities
Walmart de Mexico promoted
more than 22,700 associates
in fiscal 2014.
2014 Annual Report
Toward
a more
sustainable
tomorrow
Today, 24% of
our electricity
comes from
renewable sources.
2014 Ann
ual Repor
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